Retail
A Big Writedown At Macy's (M)? A Question Of Who Is Next
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It is beginning to dawn on Wall St. that jobs are not the only thing that retailers will be cutting. The value of their stores, inventories, and any past M&A deals may be on the line.
According to Bloomberg, "The second-largest U.S. department-store company may write down its goodwill by as much as $3 billion after-tax as early as this month, said Dan Poole, who researches stocks for National City Private Client Group." Part of the action would be due to the value of May Department Store assets. Macy’s bought the chain three years ago.
Several large chains, including Rite Aid (RAD), have closed substantial transactions since 2004. Accountants will put pressure retailers to revalue their assets which have certainly been undermined by revenues which are down and will be down for some time.
Douglas A. McIntyre
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